Operating Costs - Internal View

You know you cannot do it all.  You hired good people to run your areas. 
The same can hold true for them on a smaller scale.  They cannot know it all themselves either.  They need to have the general view, the big picture, for their department.  Like you, they will have some special skills.  And like you, they will have some areas they do not know as much about.
As you grow, that can become an issue.  Initially, some costs were too small to care about.   Now you spend more significant dollars.  You cannot expect your people to be experts on every cost in their area.  However, that does not mean it can be ignored. 
Your telecom costs may have been pretty small but now you shell out a couple grand a month.  You are not an expert in telecom, nor your head of IT, your controller or your office manager. 
Sometimes nothing or little is done.  You keep rolling year after year with the same supplier.  Or you may put it up for bid and switch.  Yet you still could be spending more than you should.
You may have someone in your company put it on their radar.  He tries hard and makes some headway.  He may knock down your costs some, yet you still spend more than you should.
Get Outside Expert Reviews of Some Operating Costs

You will have some operating costs you have to spend money on that are just a cost of doing business.  You cannot be an expert on these.  Nor does it make sense for you to have an internal person who knows that much either.  They have other areas that are better uses of their time.  Some examples include:

•    Real estate taxes
•    Telecom costs
•    Utility costs
•    Shipping costs
•    Travel costs
•    Personnel benefits
•    Insurance costs

These costs are not core to your business.  Still you are spending enough money that it is worth it for you to have them looked at.

Rather than forcing someone internal to start with Telecom for Dummies and try to become a resident expert, turn to an outside expert who does this for a living.  There are firms that specialize on these costs.  They are not providers themselves.  But they do know where you can save money.  They know where companies get overcharged; usually it is not any gouging, but just not having the best programs and the supplier not knowing enough about you.  They have relationships.  They know how to get these savings for you.  They also can audit past spending and get refunds in some cases.

Your suppliers could help.  You may be too small in an area to rely on an independent outside expert.  However, if you are large enough, it makes sense to get an outside view.

They usually work on a percentage of the one year savings.  You get to benefit in future years as well.  There is no cost to you, other than your people’s time.  If they do not find any savings, you do not get charged. 

Depending upon your size, you might be able to negotiate a different arrangement.  Or if you are too small, perhaps you can find a for fee consultant to help you out.

Do not just go for the first firm to call on you- such as a shipping cost audit firm.  Shop around.  You may find a firm that can handle multiple areas.   That can cut down on your time.

When you are spending enough on some of these costs, get the outside view.  You could soon be viewing more money inside your pocket.


 

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